Oil and gas realities we cannot avoid – Part Two

U.S. natural gas is the new, global, soft power weapon


Oil and gas realities we cannot avoid – Part Two


By Dr. Jay LehrRobert Lyman


A central thesis of those who advocate for complete “decarbonization” of the global energy economy is that the world’s reserves of oil and natural gas are steadily declining and becoming far too expensive to produce.  1 The “end of oil” story has been published many times over for several decades, and by repetition alone has become broadly accepted in the media and by many in government. The purpose of this two part essay is to examine what the best available expert analysis indicates about the present and potential future oil and natural gas resources and what this means for the climate policy debate in The US and other countries. Part one dealt with oil and natural gas while this second part deals further with natural gas.


Proven reserves of natural gas are less widely distributed than those of crude oil. At the end of 2020, global gas reserves totaled 6,842 Tcf. Over 70% of these reserves are in the Middle East (40.1%) and the Commonwealth of Independent States (CIS), which includes many of the countries of the former Soviet Union. Table 1 lists the 13 countries with the largest proven gas reserves.


Table 1


Countries with the Largest Proven Gas Reserves at End 2020


Country Reserves (Tcf Share of Total (%)


Russia 1,321 19.9

Iran 1,134 17.1

Saudi Arabia 871 13.1

Turkmenistan 480 7.2

United States 445 6.7

China 297 4.5

Venezuela 221 3.3

United Arab Emirates 210 3.2

Nigeria 193 2.9

Iraq 125 1.9

Azerbaijan 88 1.3

Australia 84 1.3

Canada 83 1.3

Source: BP Statistical Review of World Energy 2021


We draw the following observations from this table:


  • The four largest gas reserve holders, with 57% of the world total, are in Asia.
  • The OECD (Organization for Economic Cooperation and Development) countries on the list (United States, Canada and Australia) together account for only 9.3% of the world’s proven gas reserves.
  • No European country is on this list. In fact, the only European country with significant gas reserves is Norway, with 51 Tcf, 0.8% of the global total.
  • Russia’s dominant reserves position places it in a unique position to threaten the security of western Europe’s gas supply for the foreseeable future.
  • As in the case of oil, the removal of sanctions on Iran may open the door to a large increase in gas production in that country.


Global proven gas reserves grew from 138 trillion cubic metres in 2000 to 188 trillion cubic metres in 2020. We are not “running out of gas”.


Oil and Gas Resources


The United States Geological Survey (USGS) is the most authoritative source of information on world oil and gas resources. Unfortunately, it only updates its global analysis and overview every 12 years, and the most recent one was published in 2012. Still, from that report one can draw several important observations about present and future resource availability. A good summary of the USGS survey can be found here:




In 2012, the USGS assessed undiscovered oil and gas resources in 171 geologic provinces, but reported them by geographic region.


For undiscovered, technically recoverable resources, the mean totals (expected amounts) for the world are as follows:


  • 565,298 million barrels of oil
  • 5,605,625 billion cubic feet of gas
  • 166,668 million barrels of natural gas liquids


About 75% of the undiscovered conventional oil in the world is in four regions: South America and the Caribbean; sub-Saharan Africa; the Middle East and North Africa; and the Arctic provinces portion of North America (i.e. Alaska and northern Canada). The USGS also found that significant undiscovered natural gas resources remain in all of the world’s regions.


We have summarized in Table 2 the most notable findings of the 2012 USGS report, focusing on the mean estimates (expected amounts) and the 95% likely (i.e. virtually certain) estimates by region for oil and gas.


Table 2


USGS Estimates of Undiscovered Resources by Geographic Region


Oil (billion barrels) Gas (Tcf)


Region Mean (expected) 95% Mean(Expected) 95%


Arctic Ocean 66 16 238 55

Former USSR n/a 1,385 343

ME/North Africa 111 43 797 334

Asia/Pacific 48 21 608 270

Europe 10 4 127 54

North America 83 26 421 118

South America 126 45 383 130

Sub-Saharan Africa 115 41 621 278

South Asia 6 3 144 69

Source: U.S Geological Survey


We draw the following observations from the forgoing:


  • The combined total of proven plus estimated undiscovered oil resources (mean estimate) is about 2.3 trillion barrels.
  • The combined total of proven plus undiscovered natural gas resources (mean estimate) is about 12,200 Tcf
  • The regions with the largest undiscovered oil resources are South and Central America, Sub-Saharan Africa and the Middle East/North Africa. If/when conditions are right for the economic exploitation of these resource in some of the poorest countries in the world, it is difficult to imagine the people there not taking advantage of this opportunity.
  • Similarly, the regions with the largest undiscovered natural gas resources are in the CIS countries, the Middle East, and North and Sub-Saharan Africa.
  • Europe and South Asia have the lowest levels of undiscovered oil resources, but both have sizeable potential for undiscovered natural gas potential.


Unconventional Oil


The USGS study focused on conventional resources. There has been no comparable global survey of the resource potential of unconventional resources, such as extra-heavy oil of the type found in the bituminous sands of Alberta, Canada and the Orinoco region of Venezuela.


There are other sources of unconventional oil and gas, notably from deep under-water production platforms of the type increasingly seen in the Brazilian offshore, in the high Arctic (now barely touched in terms of exploration), in ultra-deep onshore wells below 15,000 feet, and in natural gas extracted from hydrates in deep ocean areas It is almost impossible to predict which new recovery technologies may become available. If the past is any guide, however, the supply of oil and gas in established economically recoverable reserves is likely to go on growing for the indefinite future.


The Clash with Climate Policy


The current trend in global energy demand is for a steady growth, especially in Asia. World oil demand in 2022 will almost certainly exceed 100 million barrels per day and perhaps surpass the peak reached in 2019 before the global pandemic.2 Projections by the US Energy Information Administration indicate that oil demand by 2040 will be higher than it is today.3 Natural gas demand is growing even faster.4


The governments of most OECD countries, especially in North America and western Europe, have embraced the goal of decarbonization by 2050. Never before in human history have governments attempted to eliminate the use of commodities whose supply is likely to be ever more plentiful. The European countries, with few oil and gas resources, suffer little if their production is impaired. Yet, in 2020, OECD consumption of oil, natural gas and coal totaled 169 exajoules and that of the non-OECD countries totaled 294 exajoules. In other words, two-thirds of the world’s consumption of fossil fuels already occurs in the developing countries and that proportion is steadily rising. Demand in the non-OECD has been growing due to higher levels of economic and population growth.


As shown in this two part series there is significant opportunity for development of immense hydrocarbon resources in Africa and Asia. Western governments may wring their hands in dismay and impose ever higher costs on their citizens to forego the benefits of secure oil and gas development and use, but the increasing resource availability and related economic development benefits are almost certain to place most other countries on a different path. The limited availability of indigenous hydrocarbons resources in western Europe signals an emerging and probably long-term security problem that the NATO countries ignore at their peril.


1 Rex Weyler. The Decline of Oil has Already Begun. Greenpeace, March 22, 2020
2 https://www.eia.gov/outlooks/ieo/consumption/sub-topic-01.php
3 ibid
4 ibid


Dr. Jay Lehr
CFACT Senior Science Analyst Jay Lehr has authored more than 1,000 magazine and journal articles and 36 books. Jay’s new book A Hitchhikers Journey Through Climate Change written with Teri Ciccone is now available on Kindle and Amazon.
Robert Lyman
Robert Lyman is an economist with 37 years of service to the Canadian government.


From cfact.org